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8-K - REX AMERICAN RESOURCES Corpc101790_8k-ixbrl.htm

Exhibit 99

 

 

News Announcement For Immediate Release

 

REX AMERICAN RESOURCES REPORTS FISCAL 2021
FIRST QUARTER NET INCOME PER SHARE ATTRIBUTABLE TO
REX COMMON SHAREHOLDERS OF $1.30 VERSUS A LOSS OF $1.21
PER SHARE IN THE YEAR-AGO PERIOD

 

Dayton, Ohio, (May 26, 2021) -- REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2021 first quarter (“Q1 ‘21”) ended April 30, 2021. REX management will host a conference call and webcast today at 11:00 a.m. ET.

 

Conference Call: 212/231-2911
Webcast / Replay URL: www.rexamerican.com/Corp/Page4.aspx
  The webcast will be available for replay for 30 days.

 

REX American Resources’ Q1 ‘21 results principally reflect its interests in six ethanol production facilities and its refined coal operation. The One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) ethanol production facilities are consolidated, as is the refined coal entity, while those of its four other ethanol plants are reported as equity in income of unconsolidated ethanol affiliates. The Company reports results for its two business segments as ethanol and by-products, and refined coal.

 

REX’s Q1 ‘21 net sales and revenue were $164.1 million, compared with $83.3 million in Q1 ‘20. The year-over-year net sales and revenue increase was primarily due to higher ethanol production levels as compared to the prior year levels, which were significantly impacted by the Covid-19 pandemic, as well as higher ethanol and dried distillers grains and modified distillers grains pricing. Primarily reflecting the revenue growth, offset in part by increased input corn pricing, Q1 ‘21 gross profit for the Company’s ethanol and by-products segment increased to $19.5 million, compared with a loss of $8.2 million in Q1 ‘20. As a result, the ethanol and by-products segment had income before income taxes of $11.1 million in Q1 ‘21, compared to a loss of $12.4 million in Q1 ‘20. The Company’s refined coal operation incurred a $1.7 million gross loss and a $1.8 million loss before income taxes in Q1 ‘21, compared to a $1.1 million gross loss and a loss before income taxes of $0.8 million in Q1 ‘20. REX reported Q1 ‘21 income before income taxes and non-controlling interests of $8.4 million, compared with a loss before income taxes and non-controlling interests of $13.7 million in the comparable year ago period. While the refined coal operation negatively impacted gross profit and income before income taxes, it contributed a tax benefit of $2.2 million and $1.0 million for Q1 ‘21 and Q1 ‘20, respectively.

 

Net income attributable to REX shareholders in Q1 ‘21 was $7.8 million, compared to a net loss of $7.6 million in Q1 ‘20. Q1 ‘21 basic and diluted net income per share attributable to REX common shareholders was $1.30, compared to a net loss per share of $1.21 in Q1 ‘20. Per share results in Q1 ‘21 and Q1 ‘20 are based on 6,010,000 and 6,304,000 diluted weighted average shares outstanding, respectively.

 

-more-

 
REX American Resources Q1 ‘21 Results, 5/26/2021 page 2

 

Segment Income Statement Data:

($ in thousands)  Three Months
Ended
April 30,
 
   2021   2020 
Net sales and revenue:          
Ethanol & By-Products (1)  $164,042   $83,235 
Refined coal (2) (3)   62    15 
Total net sales and revenue  $164,104   $83,250 
           
Gross profit (loss):          
Ethanol & By-Products (1)  $19,477   $(8,223) 
Refined coal (2)   (1,675)    (1,107) 
Total gross profit (loss)  $17,802   $(9,330) 
           
Income (loss) before income taxes:          
Ethanol & By-Products (1)  $11,082   $(12,351) 
Refined coal (2)   (1,795)    (847) 
Corporate and other   (860)    (545) 
Total income (loss) before income taxes  $8,427   $(13,743) 
           
(Provision) benefit for income taxes:          
Ethanol & By-Products  $(2,436)   $4,161 
Refined coal   2,195    959 
Corporate and other   212    193 
Total (provision) benefit for income taxes  $(29)   $5,313 
           
Net income (loss) attributable to REX common shareholders:          
Ethanol & By-Products  $7,952   $(7,433) 
Refined coal   480    150 
Corporate and other   (648)    (352) 
Net income (loss) attributable to REX common shareholders  $7,784   $(7,635) 

 

(1) Includes results attributable to non-controlling interests of approximately 24.5% for One Earth and approximately 1% for NuGen.
(2) Includes results attributable to non-controlling interests of approximately 5%.
(3) Refined coal sales are reported net of the cost of coal.

 

REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented, “The operating environment in the first quarter of fiscal 2021 was markedly better than the challenging environment we experienced throughout most of fiscal 2020, with significant improvements to demand and pricing across our ethanol and by-products segments. With all of our high-quality plants in operation, we were able to leverage our strategic locations across the corn belt and healthy liquidity position to generate first quarter net income of $7.8 million and earnings per share of $1.30.”

 

Balance Sheet

At April 30, 2021, REX had cash and cash equivalents and short-term investments of $193.0 million, $45.9 million of which was at the parent company, and $147.1 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2021, of $180.7 million, $48.2 million of which was at the parent company, and $132.5 million of which was at its consolidated ethanol production facilities.

 

-more-

 
REX American Resources Q1 ‘21 Results, 5/26/2021 page 3

 

The following table summarizes select data related to REX’s
consolidated alternative energy interests:

 

   Three Months
Ended
April 30,
 
   2021   2020 
Average selling price per gallon of ethanol (net of hedging)  $1.79   $1.25 
Average selling price per ton of dried distillers grains  $208.92   $145.64 
Average selling price per pound of non-food grade corn oil  $0.33   $0.25 
Average selling price per ton of modified distillers grains  $71.54   $65.82 
Average cost per bushel of grain  $5.16   $3.93 
Average cost of natural gas (per MmBtu)  $3.18   $3.93 

 

Supplemental data related to REX’s ethanol interests:

 

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of April 30, 2021
(gallons in millions)
Entity Trailing
Twelve
Months
Gallons
Shipped
Current
REX
Ownership
Interest
REX’s Current Effective
Ownership of Trailing
Twelve Month
Gallons Shipped

One Earth Energy, LLC

Gibson City, IL

119.2 75.5%       90.0

NuGen Energy, LLC

Marion, SD

119.6 99.5% 119.0

Big River Resources West Burlington, LLC

West Burlington, IA

97.3 10.3% 10.0

Big River Resources Galva, LLC

Galva, IL

111.5 10.3% 11.5

Big River United Energy, LLC

Dyersville, IA

113.8 5.7% 6.5

Big River Resources Boyceville, LLC

Boyceville, WI

55.8 10.3% 5.7

Total

     617.2 n/a 242.7

 

-more-

 
REX American Resources Q1 ‘21 Results, 5/26/2021 page 4

 

REX further announced today that it had filed additional supplemental proxy materials related to its Annual Shareholder Meeting to be held on June 16, 2021. The additional information related to the voting requirements of Proposal 3, in particular the treatment of abstentions and broker non-votes. Proposal 3, which is an amendment to the Amended Certificate of Incorporation to authorize a new class of Preferred Stock, requires the affirmative vote of holders of a majority of shares entitled to vote at the Annual Meeting. Therefore, abstentions and broker non-votes will have the effect of a vote against the proposal.

 

First Quarter Conference Call

REX will host a conference call at 11:00 a.m. ET today. Senior management will discuss the quarterly financial results and host a question-and-answer session. The dial in number for the audio conference call is 212/231-2911 (domestic and international callers).

 

Participants can also listen to a live webcast of the call on the Company’s website, www.rexamerican.com. A webcast replay will be available for 30 days following the live event.

 

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 617 million gallons of ethanol over the twelve-month period ended April 30, 2021. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended January 31, 2021) by the ethanol production facilities in which it has ownership interests was approximately 243 million gallons. In addition, the Company acquired a refined coal operation in August 2017. Further information about REX is available at www.rexamerican.com.

 

This news announcement contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as “may,” “expect,” “believe,” “estimate,” “anticipate” or “continue” or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and include among other things: the effect of pandemics such as COVID-19 on the Company’s business operations, including impacts on supplies, demand, personnel and other factors, the impact of legislative and regulatory changes, the price volatility and availability of corn, distillers grains, ethanol, non-food grade corn oil, gasoline and natural gas, ethanol and refined coal plants operating efficiently and according to forecasts and projections, changes in the international, national or regional economies, weather, results of income tax audits, changes in income tax laws or regulations, the impact of U.S. foreign trade policy, changes in foreign currency exchange rates and the effects of terrorism or acts of war. The Company does not intend to update publicly any forward-looking statements except as required by law.

 

Contact:  
Douglas Bruggeman Joseph Jaffoni, Norberto Aja
Chief Financial Officer JCIR
(937) 276-3931 (212) 835-8500
  rex@jcir.com

 

- statements of operations follow -

 
REX American Resources Q1 ’21 Results, 5/26/2021 page 5

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share amounts)

Unaudited

 

   Three Months
  Ended
 
   April 30, 
   2021   2020 
Net sales and revenue  $164,104   $83,250 
Cost of sales   146,302    92,580 
Gross profit (loss)   17,802    (9,330) 
Selling, general and administrative expenses   (9,988)    (4,605) 
Equity in income (loss) of unconsolidated ethanol affiliates   570    (477) 
Interest and other income, net   43    669 
Income (loss) before income taxes and non-controlling interests   8,427    (13,743) 
(Provision) benefit for income taxes   (29)    5,313 
Net income (loss) including non-controlling interests   8,398    (8,430) 
Net (income) loss attributable to non-controlling interests   (614)    795 
Net income (loss) attributable to REX common shareholders  $7,784   $(7,635) 
           
Weighted average shares outstanding – basic and diluted   6,010    6,304 
           
Basic and diluted net income (loss) per share attributable to REX common shareholders  $1.30    ($1.21) 

 

- balance sheets follow -

 
REX American Resources Q1 ’21 Results, 5/26/21 page 6

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

 

 

   April 30,   January 31, 
ASSETS  2021   2021 
CURRENT ASSETS:          
Cash and cash equivalents  $157,105   $144,501 
Short-term investments   35,864    36,194 
Restricted cash   1,717    1,657 
Accounts receivable   27,557    19,713 
Inventory   26,687    37,880 
Refundable income taxes   6,020    6,020 
Prepaid expenses and other   14,831    12,785 
Total current assets   269,781    258,750 
Property and equipment-net   149,067    153,186 
Operating lease right-of-use assets   11,289    12,678 
Deferred taxes and other assets   25,977    25,275 
Equity method investment   30,026    29,456 
TOTAL ASSETS  $486,140   $479,345 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
          
Accounts payable – trade  $15,808   $16,907 
Current operating lease liabilities   4,632    4,875 
Accrued expenses and other current liabilities   9,185    8,955 
Total current liabilities   29,625    30,737 
LONG TERM LIABILITIES:          
Deferred taxes   4,294    3,713 
Long-term operating lease liabilities   6,327    7,439 
Other long-term liabilities   278    273 
Total long-term liabilities   10,899    11,425 
COMMITMENTS AND CONTINGENCIES EQUITY:          
REX shareholders’ equity:          
Common stock, 45,000 shares authorized, 29,853 shares issued at par   299    299 
Paid in capital   149,144    149,110 
Retained earnings   597,770    589,986 
Treasury stock, 23,861 shares   (354,604)    (354,612) 
Total REX shareholders’ equity   392,609    384,783 
Non-controlling interests   53,007    52,400 
Total equity   445,616    437,183 
TOTAL LIABILITIES AND EQUITY  $486,140   $479,345 

 

- statements of cash flows follow -

 
REX American Resources Q1 ’21 Results, 5/26/21 page 7

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

 

   Three Months Ended
April 30,
 
   2021   2020 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income (loss)  $8,398   $(8,430) 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          
Depreciation   5,249    5,315 
Amortization of operating lease right-of-use assets   1,389    1,347 
(Income) loss  from equity method investments   (570)    477 
Dividends received from equity method investments   -    2,005 
Interest income from investments   (15)    (125) 
Deferred income tax   20    (1,748) 
Stock based compensation expense   291    39 
Gain on sale of property and equipment – net   (3)    (3) 
Changes in assets and liabilities:          
Accounts receivable   (7,844)    10,197 
Inventory   11,193    8,366 
Other assets   (2,187)    (3,759) 
Accounts payable-trade   (989)    (11,934) 
Other liabilities   (1,369)    (2,008) 
Net cash provided by (used in) operating activities   13,563    (261) 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (1,267)    (4,700) 
Purchases of short-term investments   (25,930)    (19,237) 
Sales of short-term investments   26,275    12,834 
Other   30    (278) 
Net cash used in investing activities   (892)    (11,381) 
CASH FLOWS FROM FINANCING ACTIVITIES:          
Treasury stock acquired   -    (3,923) 
Payments to noncontrolling interests holders   (75)    (35) 
Capital contributions from minority investor   68    10 
Net cash used in financing activities   (7)    (3,948) 
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   12,664    (15,590) 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period   146,158    180,771 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period  $158,822   $165,181 
Non cash financing activities – Stock awards accrued  $348   $- 
Non cash investing activities – Accrued capital expenditures  $280   $457 
Operating lease right-of-use assets acquired and liabilities assumed upon lease execution  $-   $1,863 

 

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